The rupee rebounded 11 paise to 73.84 against the dollar in early trade Thursday on increased selling of the American currency by exporters.
At the interbank foreign exchange, after opening higher at 73.88 rupee strengthened further to quote at 73.84 against the dollar registering a recovery of 11 paise over its previous close.
The dollar's weakness against some currencies overseas and a better opening of domestic equities supported the rupee's recovery, traders said.
Easing concerns around the rift between the government and the RBI, after the Finance Ministry said the autonomy for the central bank, within the framework of the RBI Act, was an "essential and accepted" governance requirement, also lifted the the local unit, they added.
On Wednesday, the rupee had plunged 27 paise to close at nearly three-week low of 73.95 as the American currency strengthened against major global currencies overseas amid steady capital outflows.
Meanwhile, the benchmark Sensex went up 149.36 points, or 0.44 per cent, to 34,591.41 in opening trade.